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Democrats reach compromise on hydraulic fracturing as EPA continues its working on regulating methane

Democrats reach compromise on hydraulic fracturing as EPA continues its working on regulating methane

Democrats reach compromise on hydraulic fracturing as EPA continues its working on regulating methane

Regional Capabilities:

July 13, 2016

In the US, there is growing divide on how to reduce methane emissions from the oil and gas sector. This debate is impacting Democratic presidential politics and could affect future regulatory efforts at the federal, state and local levels. Over the last decade, technological advances such as hydraulic fracturing have spurred significant growth in US unconventional natural gas production, which has in turn helped to reduce US carbon dioxide (CO2) emissions as power plants have transitioned from coal to natural gas. At the same time, there are increasing concerns about methane emissions associated with the natural gas sector and whether such emissions could undercut broader US efforts to reduce greenhouse gas (GHG) emissions.

In the contest for the Democratic presidential nomination, hydraulic fracturing emerged as one of the principal differences between Hillary Clinton and Senator Bernie Sanders on energy and climate change policy. Sanders has called for a ban on hydraulic fracturing due to the alleged climate change and environmental impacts associated with unconventional natural gas production. Clinton, however, declined to support a ban on hydraulic fracturing. Instead she laid out three conditions under which she could support hydraulic fracturing: (1) states and/or localities are not opposed to it; (2) the release of methane or water is prevented; and (3) companies disclose what chemicals are contained in their hydraulic fracturing fluids.

This ideological difference between Clinton and Sanders on hydraulic fracturing has carried onto the drafting of the Democratic Party platform. A 15-person Platform Drafting Committee has been developing the party's national platform. As an olive branch to Sanders, the DNC provided him with the ability to appoint several members to the platform committee. One of Sanders' appointees, Bill McKibben, is a noted climate change advocate who used use his position on the committee to push for a ban on hydraulic fracturing in the party's platform. During a June meeting, the Platform Drafting Committee, however, rejected an amendment that would have called for a moratorium on hydraulic fracturing. Sanders has stated that he will continue to press for a hydraulic fracturing moratorium when the Platform Drafting Committee meets on July 8 and 9 to approve the final draft platform and at the convention when the party considers ratification of it.

At a subsequent Committee meeting on June 8 and 9th, supporters of Sanders and Clinton were able to reach a compromise. Specifically, instead of calling for a moratorium, the compromise language states that "carbon dioxide, methane, and other greenhouse gases should be priced to reflect their negative externalities." In addition, the platform now endorses closing the "Halliburton loophole," which prohibits EPA from regulating hydraulic fracturing under the Safe Drinking Water Act. The platform also says that hydraulic fracturing should not occur in states and local communities opposed to it, and that the federal permitting process should prioritize the construction of new transmission lines to bring renewable resources online over the development of new natural gas plants. It remains to be seen whether opponents of hydraulic fracturing will renew their efforts for a moratorium at the Democratic National Convention in late July when the party meets to ratify the platform.

As this intra-party debate is occurring, the Obama administration has pledged to reduce methane emissions from the oil and gas sector 40 percent to 45 percent below 2012 levels by 2025, a policy endorsed by the Democratic Platform. In May, the Obama administration took a significant step toward meeting this goal by finalizing US Environmental Protection Agency (EPA) Clean Air Act standards for methane emissions from new oil and gas sources and beginning the process of developing regulations on existing sources.

EPA's effort to regulate existing oil and gas sources will likely result in the greatest reductions in methane emissions, but these rules are arguably more costly and complicated to implement. To aid the process in developing regulations on existing sources, EPA issued a draft Information Collection Request (ICR), which will require companies to gather and submit to the agency information on methane emissions. This request covers emissions that occur during production, gathering, processing, transmission and storage. The ICR also seeks information on innovative, accurate and cost-efficient strategies that members of the industry are using to monitor and mitigate methane emissions. EPA anticipates issuing a final ICR to covered industry facilities by October 30.

With a little more than six months left in President Obama's term, the job of finalizing methane regulations on existing sources will likely be left to the next administration. Under a Clinton administration, EPA would likely forge ahead with methane restrictions; under a Trump administration, it would be expected to abandon this rulemaking. if Clinton wins, a key question is whether the truce that her and Sanders' supporters reached on the Plantform will be sufficient to quell calls for a ban on hydraulic fracturing.

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